Jung Min-seoCEDEX, the blockchain-based diamond commodity exchange, has secured a liquid supply of assets to launch its trading platform; with over 6000 diamonds with a total value of over $50 million. This ensures traders have a variety of investment options prior to the launch of the first diamond ETF; which is currently in development.
CEDEX raised $20m in March 2018 to develop its institutional-grade platform that allows investors to securely and easily trade diamonds through a Digital Diamond Certificate, while enabling diamond holders to liquidate their assets. The platform went live in Beta mode November 2018. Using both blockchain technology and the DEX, a unique proprietary algorithm, CEDEX has overcome the three main obstacles that have previously prevented diamonds from becoming a tradable asset class: lack of transparency, liquidity and fungibility.
CEDEX’s platform has solved the issues surrounding fungibility and transparency and the company is currently developing a “generic” ETF product that will allow investors to trade diamonds as a financial asset class. It is currently liaising with global partners such as commodity/retail brokerages, top exchanges, ETF issuers and banks in order to offer an API solution that will allow simple integration of the ETF products onto their trading platforms. Ultimately, enabling their customers to trade on CEDEX’s inventory and generating liquidity in the market.
The unique nature of each diamond on the exchange means traders have the opportunity to trade in diamonds of different sizes, values and diversified risk profiles; with a low carry cost. Diamonds are the only commodity that allows this.
Traders can both hedge their portfolios to preserve value and take advantage of the more volatile diamond markets (e.g. coloured diamonds) all with a single commodity. The platform’s investment tools can indicate fair market prices and proposition attractiveness levels across many diamond categories to cater for investors’ appetite for risk.
Co-Founder and CEO, Saar Levi, has a deep understanding of the commodities markets due to spending decades in senior positions at names such as Barclays and Lehman Brothers.
CEDEX enables diamond holders to trade their diamonds at a fair price using the DEX – enabling the CEDEX exchange to provide its investors with non-biased price evaluation for every single diamond that has been GIA-certified. The DEX score is based on a diamond’s gemmological perfection, market price (based on 20 years of past and current parallel data), and the liquidity of each diamond category.
Saar Levi, Co-Founder and CEO of CEDEX, has commented:
“The vast inventory available combined with CEDEX unique technolagy opens up for traditional and digital markets the opportunity to develop finanacial instruments that will initially create the liquidity needed to jumpstart our vision – transforming diamonds into a new asset class.”
“Bridging the gap between existing financial markets and the diamond industry will fuel this untapped market from a $90 billion industry to an estimated $300-$400 billion.”
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